By MELANIE WARNER
Kinder Morgan Inc. agreed to sell certain Kinder Morgan Energy Partners LP assets in order to receive US Federal Trade Commission (FTC) approval of its proposed El Paso Corp. acquisition.
Kinder Morgan agreed to buy El Paso in a cash-and-stock deal valued at $21.1 billion when announced in October. Last week, El Paso shareholders overwhelmingly approved the sale, which would create North America's largest natural gas pipeline operator.
Kinder Morgan Energy transports natural gas and coal.
Under the tentative FTC agreement, Kinder Morgan will sell Kinder Morgan Interstate Gas Transmission; Trailblazer Pipeline Co.; its Casper-Douglas natural gas processing and West Frenchie Draw treating facilities in Wyoming; and the company's 50% interest in the Rockies Express Pipeline.
"We would prefer to retain all of these assets, but as we anticipated when the transaction was announced, we must sell certain assets in the Rockies to obtain FTC approval," Chairman and Chief Executive Richard D. Kinder said.
Kinder Morgan expects to offer drop-down El Paso assets to Kinder Morgan Energy to replace the assets that latter will divest.
El Paso also expects to offer drop-down assets to El Paso Partners LP, a natural-gas pipeline and storage facility operator.
Kinder Morgan now expects to close the El Paso acquisition in middle to late May.
Dow Jones Newswires